genuinegirly

The Euro is falling apart. Greece isn't the only country facing economic collapse, things look grim for Portugal, Ireland, Italy, Spain -- even Scotland is admitting there's a big problem. At the moment it looks like Germany is the only country with the financial clout, and is the glue holding the EU together. But how long will they be willing to bail out their unenterprising neighbors? When will they say enough, and what will be the consequences of such a vocalization?

Do you think I'm blowing Europe's problems out of proportion?
Or maybe Germany isn't so great, maybe they are simply better at hiding their problems. What is your take on Europe's financial woes, and how do you think it will affect your region's finances or politics?

Here are a few articles that I have found interesting on the topic. Feel free to share your favorites as well.
Time Magazine: The Euro Crisis: How Much Worse Can It Get? - Yahoo! News
AP: German banks to help Greek bailout, Portugal orders austerity measures | OregonLive.com
Reuters: Bailout fatigue forces Germany to hear the skeptics | Reuters

__________________
"Sometimes I have to remember that things are brought to me for a reason, either for my own lessons or for the benefit of others." Cynthetiq

"violence is no more or less real than non-violence." roachboy

Remixer

Germany's economy is doing very well. Besides, German government and banks belong to the most transparent in the world. To hide something like high financial instability of the entire economy is next to impossible.

I agree with many criticisms of the Eurozone. We shouldn't have agreed to accept states as members without the slightest sense of common sense. I mean, Greece? Retiring women in their 50s, giving unmarried women (some in their 30s!) a substantial living allowance for nothing in return? Fucking hell.

Baraka_Guru

You mean Greece? The place where paying taxes is merely a suggestion?

The European Union is an economic powerhouse, much in the same way that the U.S. is an economic powerhouse (it's a ~$15 trillion economy, compared to the U.S. ~$14 trillion economy). The difference is that the EU is made up of a group of sovereign nations, whereas the U.S. is made up of a union of states under a single nation.

Talking about the Euro crumbling can in many ways draw parallels to discussions on the crumbling U.S. dollar.

A currency's value is a reflection of an economy's stability. Clearly, neither the U.S. nor the EU are all that stable compared to what is normally expected of them. What both are facing are unprecedented and nearly unmitigated disasters. What is often the case in situations such as these is either failure or change. The status quo is difficult to maintain when it's the thing responsible for the disaster on one hand and otherwise responsible for instability in response to outside forces on the other.

The EU will be okay. How well it fares ultimately and what sorts of changes that will occur will be largely dependent on the actions taken by each member state.

Greece needs a major reform regarding how it collects and spends tax dollars. There are other problems as well.

I'm not sure what went wrong in Ireland, but over the last ten years or so, they've been doing well economically. Whatever it was that knocked them on their ass should hopefully be contained/rectified in order to get the nation back on track.

As for the others, I really don't know what's wrong with them. But if hard lessons are learned and meaningful change is made, then the EU can very well return to a more stable economic environment.

However, there are also problems on the macro level in terms of how the union regulates itself across the board. I think this is where the interesting stories lie. How the union goes forward in light of the lapse in stability will greatly determine its ability to avoid such a situation in the future.

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Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

eribrav

The key difference, U.S. versus Europe is that we have a printing press and we are printing dollars like mad, and can continue to do so to the Fed's and Treasury's content.
The Euro member states don't have access to the printing press. They can't print money and inflate debt away.
The Euro as a piece of paper is done for.
Greece is going to default, it's just a question of when and deciding who will take the biggest hit.

roachboy

i dont see the euro zone--or the e.u.---as in danger. but there are profound stabilization problems at the system level and no institutional infrastructure that's in place to address them. this follows from the various follies that underpin capitalist relations since the nixon administration began to dismantle the bretton woods system. that system was fashioned just after world war 2 and had a series of mechanisms in place that were designed to stabilize national economies---which isn't a real surprise given that it was a response to a world war. the american understanding of fascism at the time linked it directly to the currency problems experienced by weimar. presumably some looseness of interpretation held to accomodate italy---japan was treated as its own particular case. this enabled the americans to dodge the question of how fascism was linked to nationalism---which is not surprising when you think about it---but it'd be a digression. the nixon administration began dismantling bretton woods in the early 1970s and is largely responsible for putting into motion the casino capitalism the weakness of which are being exposed. for example, in the bretton woods system, the imf's role was a kind of system governor, like on an engine. it would intervene using instruments of short-term debt to stabilize currencies---which were in any event pegged to the dollar so values were no set in currency markets as they since have been. if you approach currency valuation with an experience of world war just behind you, volatility is a Problem. if you approach it after 30 years of more-or-less continuous expansion, it isn't so much. one result of the nixon administration's moves away from the bretton woods arrangement was a defunctionalisation of the imf, which became something of a generator of crisis, really---almost a specialist in it---typically in the interest of neo-liberal privatizations, which operated in the main to the financial advantage of very large corporations. since then, there's been this process they call globalization. one aspect of that has been a transnationalization of capital flows and a very considerable acceleration of their movements. one consequence of that has been a separation of corporations from any particular space---another has been a considerable increase in the ways that tncs can hide revenues---a consequence of which has been a diminuition in tax revenues from them. this is a big deal. you don't hear a lot about it in the american press because--well---it's corporate-owned. but i digress. the neo-liberal debt circulation system amongst nation-states is something i don't entirely understand---i was thinking as i started writing this that it'd be good to know about it--i just haven't looked into it. what's clear about it is that it developed and operated within the general framework of neo-liberal thinking, which assumed away crisis. and for a remarkably long time, on that level (if on no other) crisis hadn't really turned up---there have been Problems, but nothing of a magnitude that has threatened the functioning of the system as a whole. what's happening over the past couple years is such a crisis.

in principle, the problem in southern europe with debt flows from the unwillingness of the various national political orders to face down the holders of capital, force them into taking a loss in the interest of system stability and vaporize the debt. the southern countries are also unwilling to follow argentina's lead and annul it on their own. what looks to be at stake is the power of the private financial sector in system-level maintenance. but that sector is not competent to have the power they have. that seems to me to be in a nutshell what the Problem is.

a second problem follows from the ability of corporations to evade taxes. what is required to stop that is international law to do it. what is required for that is a trans-national institutional structure that can enforce the laws. at present that doesn't exist. at all. not even within the e.u.

what it looks like is that the network society---manuel castells name for where we are--has long outstripped the capacities of nation-states to regulate it. so there's an institutional Problem that's emerging as the social and political requirements for capitalist functionality cannot be met within the existing institutional infrastructure in a situation of system-level crisis.

the central obstacle to addressing this is the same neo-liberal ideology that enabled this situation in the first place because it is largely a conservative-dominated ideology that relies in the end on nationalism to have a discourse at all. so addressing the institutional problems would be a nail in the coffin of conservative thinking as it currently exists. the other problem is in a sense accidental---the collapse of an alternative ideologial viewpoint which followed on the collapse of the political left---which wouldn't be in a position to address this situation in any event, mired as it was in an outmoded marxian way of thinking about capitalism. the problem is there that there's nothing---not really---available as an alternative framework. this, in combination with the ideological hegemony exercised by neo-liberal "thinking" since the 80s, boxes people in cognitively. and that is playing no small part in the general crisis we are stuck in.

the euro-zone problems as merely an aspect of that.

i'm trying to stay off my hobby-horse of talking about the collapse of the american empire, but that's also a factor. the way to stay off it is to push post. which is what i will now do.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

ASU2003

I am much more worried about the US. The Euro is still @ $1.41 USD to 1 Euro...

In the US, you have Minnesota shut down, California has some financial mess (even though life goes on as normal there), and the South is 'lowing taxes' with ill-regard to the chaos and poverty that they are creating everywhere. Outsourcing has led to increasing taxes and prices on goods and services that can't be done overseas (the revenue has to come from somewhere).

Lowering corporate taxes didn't work, again?


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The biggest problem is that energy is getting expensive, and 'most people' aren't willing to reduce their spending on oil and other energy imports. In the US, $1 billion dollars each and every day would go a long way to getting people back to work, fixing schools, and building stuff again.

The second biggest problem is people are living unhealthy lifestyles, either by choice, bad luck, or by not getting cheap preventative care. The fact that there is more money in keeping people hooked on drugs everyday vs a cheap one-time vaccine has made things too expensive.

In Europe, they should be in a better position to get out of this financial mess. They need to look into the smoking bans that the US imposed, and reduce the unhealthy food served in fast food places, and continue improving their good rail system and reduce oil imports.[COLOR="DarkSlateGray"]